Financial Communique » markets

Sarkozy attacked financial and monetary markets

Viliyana Filipova — Thu, 26 Aug 2010 06:27:57 +0000

The French President Nicolas Sarkozy again called on leaders of the 20 most advanced economies to work together for comprehensive reform of the global monetary system. “We need to create a new framework for discussion of movements in exchange rates,” said Sarkozy, adding that China is not meaningless to talk about conversion rates. As a reason for it indicates the huge reserves of foreign currency available to the Asian country. Sarkozy said that the stabilization of moving large change currency markets and raw materials will be the main topic of the G-20 are in November. It will pass under the presidency of France, as the country holds the rotating presidency of the G-20 and G-8 November. Important topic will be the need to limit the dominance of the U.S. dollar as primary reserve currency. In this respect, Sarkozy calls for action towards increasing the role of alternative currencies. Improving the coordination of economic policies at the global level is also among the priorities of Sarkozy as he said so you can be battled volatile exchange rates. This is necessary as a prevention against the accumulation of significant reserves, particularly in developing countries.
Volatile exchange rates are “real threat” to economic growth, Mr Sarkozy said in the presentation of priorities. One of his goals is the conversion rates to be put in a mechanism to prevent excessive movements. The French president, however, that not calling for a return to fixed exchange rates. Rather, his idea was to call in to join and China and through which to enhance the stability of exchange markets. Except for more serious oversight and control of exchange rates, Sarkozy calls for strengthening the control of raw materials markets. This idea is raw material to be subjected to stricter regulations similar to those for financial markets.

New calm week is expecting leading markets

Viliyana Filipova — Mon, 23 Aug 2010 12:14:51 +0000

New week would probably passed as well as the previous – with a relatively limited number of corporate news, low liquidity and routine economic indicators. However, this poses its own risks and, as it is a low liquidity market movements can be quite sharp and dangerous. Late summer is typically a period in which investors monitor market movements from the beach – season completed reports, and most institutions have made an important decision for the economies are in summer vacation. It is the stagnation in the corporate sector is the main reason not to expect major turmoil in the market. During this week of U.S. data expected new housing market, which will be published tomorrow and Wednesday. Also on Wednesday are expected news on durable goods orders, and on Thursday are scheduled for initial unemployment data. Exactly they managed to stretch the market last week, pushed him down after a surprising increase in the requests for assistance. Most important news for the U.S. will come on Friday and are associated with preliminary data on gross domestic product for the second quarter. On the same day and is expected speech Federal Reserve Chairman Ben Bernanke.
In Europe, the week promises to be quite poor in key economic indicators such as data today are expected for PMI index for manufacturing and services in the euro area. Wednesday is a day when data will be published on the business climate in Germany, the week will end with preliminary data for inflation. More poor economic performance will be the week in the Asia Pacific region, except the trade balance of Japan in the calendar are missing key indicators for the leading countries. Only in Australia can expect more interesting news, due to parliamentary elections that were held over the weekend.

The crisis in the Eurozone did not finished according to Rubini

Viliyana Filipova — Tue, 18 May 2010 21:10:30 +0000

The turbulence in the euro area is not over, as Greece remained only “the tip of the iceberg,” warned the professor of economics at New York University Nuriel Rubini. “This front is currently facing the euro area is the second stage of a typical financial crisis,” said Rubies to radio BBC. Approved a rescue package amounting to 750 billion, intended to stop the spread of the crisis in Greece to other EU countries do not calm the markets, as questions remain whether governments are strong enough to make the necessary rigor, stated Rubini. Earlier today it became clear that it is paid the first tranche of EUR 20 billion of aid to Greece. Tomorrow ends the maturity of the Greek bonds 8.5 billion. Markets remain worried about the solvency of some European countries in the euro area as there are significant economic and financial problems, stresses Rubini. Protests in Greece against budget cuts fueling suspicions that European governments can solve such problems, he said.
If stringent measures are introduced, however, the markets will stabilize, “says Rubini.

Markets tighten noose around Portugal

Viliyana Filipova — Tue, 02 Feb 2010 22:02:35 +0000

Trade in the market for bankruptcy protection under state or contracts for protection against non-performing its obligations (credit default swaps), today passed more calmly than last week, police MarketWatch. Against this background, risk premiums of almost all countries decreased due to a narrowed and the defense costs of unserved. This happens with Spain and Greece, which last week were monitored under a magnifying glass by market participants. Not such a situation, however, with Portugal as the country risk premium went up again. According to the CMA DataVision, which provides data on the cost of credit swaps, the primary risk indicator for Greece is back below the 4 per cent and 3.97 per cent. This means that to protect the position of EUR 10 million in state bonds to Greece need to pay a premium of 397 thousand euros per year. In Spain also observed shrinkage of the risk spread, and he is now 1.61 percentage points. Although the overall stabilization of the situation, however, Portugal remained under strong pressure from the market. The country risk premium is increased to 2.34 percent from 2.27 percent on Friday.
Swaps for protection against non-performing obligations are traded on unregulated derivatives market like. Their function is to be marketed as insurance in case of suspension of payments on a bond issue. In case the issuer stops paying its obligations, the buyer gets suspend payments from the counterparty to the derivative transaction, or its vendors.

Asian markets with the strongest growth since April this year

Viliyana Filipova — Tue, 01 Dec 2009 07:47:00 +0000

After a painful downturn last week, most stock indexes in Asia and the Pacific region began this week with significant increases. Optimism prevailed among investors after the United Arab Emirates (UAE) said they would support their banks, which fell into difficulty because of the insolvency of the investment fund Dubai World. Most local currencies rose, and risk premiums on corporate bonds fell. The regional index MSCI Asia Pacific, which monitors the securities markets in ten Asian countries plus Australia and New Zealand, rose 3.5 percent to 117.85 points. This is the strongest measure of stock market growth since the beginning of April this year. Today, the UAE central bank said it stands behind the credit companies in the seven Arab Emirates, and the government of China confirmed that it will not hurry to withdraw its measures to support the economy. The financial companies in the composition of the MSCI Asia Pacific contributed most to the strong increase of the index today after last week suffered the most along the news about the financial problems of Dubai. The main stock index fell in Dubai with a record 7.2 percent last year, and the Abu Dhabi stock slid more than 8%. Today was the first business day of the exchanges in the UAE, which closed late last week because of holidays in the Arab world. The Japanese Nikkei 225 rose by 2.9 percent to 9345.6 points. Shares of exporting companies rose, although the rate of the yen against the dollar increased by 0.7 percent today. This increases the cost of Japanese goods companies abroad. In India, the BSE Sensex 30 rose 1.7 percent to 914.1 points to 16 after the country’s economy grew more than expected by 7.9 percent for the period July-September compared to last year.
The Indian rupee also become more expensive relative to the U.S. dollar. South Korean won rose by 1.1 percent to 1 162 won per dollar, which is the strongest currency growth for the last month. Finance Ministry of South Korea announced today that local banks have limited investment in the emirate of Dubai. After news of the main Kospi index in Seoul ended with an increase of 2% to 1 556 points. The Chinese Shanghai Composite Index rose further by 3.2% to 3 195.3 points, while Hong Kong’s Hang Seng added 3.3% to 21 821.5 points. In Australia, index of blue chip S & P / ASX 200 is increased by 2.8 percent to 4701.3 points, supported mainly by good performance of the banking sector. The four biggest financial companies in the country said today that they did not expect material losses from the eventual failure of the Dubai government investment holding company Dubai World, which has commitments for 59 billion dollars. On the New Zealand Stock Exchange main index NZX 50 Date added 1 percent to its value at 3125.5 points.

Painful weekly decline for the Japanese and Chinese markets

Viliyana Filipova — Mon, 30 Nov 2009 10:13:22 +0000

Today’s session brought indexes in Asia and the Pacific region, the strongest decrease their day for the past eight months, but ended the week with a painful decline in most markets in the region. Stood at the head Japanese, Chinese and South Korean securities market, which lost between 4% and 6% of its market capitalization over the past five trading sessions. Reason for mass sales became the news of the failure of the Dubai government investment holding company Dubai World to meet its obligations to creditors. The Fund has a debt for 59 billion dollars, equivalent to most of Dubai’s foreign debt to 80 billion dollars. Meanwhile, the Japanese yen rose to its highest rate against the dollar since 1995. Financial difficulties of the Dubai World stocks fell on banks and insurers in the region, led by HSBC Holdings, whose shares fell nearly 8 percent. This is due to investor concerns about exposure of large international banks to fund Dubai. Construction companies also suffered because of the activity of the Dubai World in the construction sector. The regional index MSCI Asia Pacific, which brings together companies from stock markets in ten Asian countries plus Australia and New Zealand, slid 3.2 percent to 113.78 points. This is the strongest decrease in the stock measure within one day of 30 March so far. Financial companies in its composition have contributed most to the sharp drop in MSCI Asia Pacific. The good news that unemployment in Japan fell for the third consecutive month in October, while consumer spending increased household failed to stop reductions in the indexes. Thus MSCI Asia Pacific to cut their lead to five-year bottom of 9 March to 61 percent. For the past five trading sessions the index fell by 2,7 percent.
The Japanese Nikkei 225 fell 3.2 percent to 9081.5 points. Appreciation of the yen, Japanese exporters worried as Sony, Canon and Toyota, which warned that this rate against the dollar will fail to meet set financial goals. After news of the Japanese government signaled that it may intervene in currency markets to halt the yen’s appreciation. Hong Kong’s Hang Seng was down by 4.8% to 21 134.5 points to a major Chinese Shanghai Composite Index lost 2.4% to 3 096.3 points. Earlier this week exchanges in Shanghai, Chengen and Hong Kong dropped because of fears that planned by the major banks in China issues new shares will dilute the value of existing equity. Compared to last Friday the Nikkei 225 fell by 4,4%, Hang Seng – by 5.9% and Shanghai Composite has yielded at most 6.4%. Strong weekly decline of 5.9 percent and the broad record of the Exchange Kospi index in Seoul. It slid 4.7 percent to 1524.5 points, while Dubai is not expected to cause injury crisis on the Korean economy due to limited investment in South Korea in Dubai.
Australian Index of blue chip S & P / ASX 200 is lower by 2.9 percent to 4572.1 points, mainly due to mining and energy companies after metals prices and oil prices fell significantly during today’s e-commerce in Asia. In New Zealand NZX 50 is decreased by 1.1 percent to 3094.4 points, a weekly decline in two Pacific stock exchanges amounted to 2.4% and 0.6%. U.S. futures broader index S & P 500 shows a sharp drop in Wall Street, while European markets fell heavily yesterday, as the pan-European index Dow Jones Stoxx 600 slipped 3.3 percent. Red wool, which includes the stock exchange in Sofia shows that financial markets remain very sensitive to bad news relating to bankruptcies and financial difficulties of companies. The price of oil futures with delivery in January fell by more than 6% in electronic trading on the New York oil exchange. Prices of most metals is lower, led by copper, which is cheaper by almost 5%. Commodity prices are often an accurate indicator is the tendency of investors to buy riskier assets such as shares and high-currencies.